Selling US$8.6m Of PrimeEnergy Resources Stock Rewarded Insiders
While PrimeEnergy Resources Corporation (NASDAQ:PNRG) shareholders have enjoyed a good week with stock up 12%, they need remain vigilant. The fact that insiders chose to dispose of US$8.6m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
PrimeEnergy Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Robert de Rothschild, for US$3.7m worth of shares, at about US$186 per share. That means that even when the share price was below the current price of US$227, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 9.1% of Robert de Rothschild's holding. The only individual insider seller over the last year was Robert de Rothschild.
Robert de Rothschild ditched 43.27k shares over the year. The average price per share was US$198. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for PrimeEnergy Resources
I will like PrimeEnergy Resources better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
PrimeEnergy Resources Insiders Bought Stock Recently
We saw some PrimeEnergy Resources insider buying shares in the last three months. Independent Director Harry Fong shelled out US$21k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. PrimeEnergy Resources insiders own 57% of the company, currently worth about US$204m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About PrimeEnergy Resources Insiders?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. While we gain confidence from high insider ownership of PrimeEnergy Resources, we can't say the same about their transactions in the last year, in the absence of further purchases. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for PrimeEnergy Resources.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.